The Conference Board CEI for the U.S. was unchanged in October, with employment continuing to fall and industrial production rising slightly. Between April and October 2009, the index decreased 0.7 percent (a -1.4 percent annual rate), slower than the decline of 4.1 percent (a -8.0 percent annual rate) for the previous six months. In October, the lagging economic index decreased again, and with the coincident economic index remaining unchanged, the coincident-to-lagging ratio increased further. Meanwhile, real GDP expanded at a 3.5 percent annual rate in the third quarter, its first increase since the second quarter of last year.
After having fallen steadily since mid-2007, The Conference Board LEI for the U.S. has risen for more than half a year now, appearing to have reached a trough at the end of the first quarter. Meanwhile, The Conference Board CEI for the U.S. has been essentially flat since June, after generally declining since November 2007. All in all, the behavior of the composite indexes suggests that the recession is bottoming out and that economic conditions will continue to improve in the near term.
LEADING INDICATORS
Six of the ten indicators that make up The Conference Board LEI for the U.S. increased in October. The positive contributors - beginning with the largest positive contributor - were the interest rate spread, average weekly initial claims for unemployment insurance (inverted), stock prices, average weekly manufacturing hours, real money supply and manufacturers' new orders for consumer goods and materials. The negative contributors - beginning with the largest negative contributor - were index of consumer expectations, building permits, index of supplier deliveries (vendor performance), and manufacturers' new orders for nondefense capital goods.
The Conference Board LEI for the U.S. now stands at 103.8 (2004=100). Based on revised data, this index increased 1.0 percent in September and increased 0.4 percent in August. During the six-month span through October, the leading economic index increased 5.0 percent, with eight out of ten components advancing (diffusion index, six-month span equals 80 percent).
COINCIDENT INDICATORS
Three of the four indicators that make up The Conference Board CEI for the U.S. increased in October. The positive contributors to the index - beginning with the largest positive contributor - were personal income less transfer payments, industrial production and manufacturing and trade sales. The negative contributor was employees on nonagricultural payrolls.
The Conference Board CEI for the U.S. now stands at 99.8 (2004=100). This index decreased 0.1 percent in September and increased 0.1 percent in August. During the six-month period through October, the coincident economic index decreased 0.7 percent, with one out of four components advancing (diffusion index, six-month span equals 25 percent).
LAGGING INDICATORS
The Conference Board LAG for the U.S. stands at 108.9 (2004=100) in October, with two of the seven components advancing. The positive contributors to the index - beginning with the larger positive contributor - were change in CPI for services, and change in labor cost per unit of output. The negative contributors - beginning with the largest negative contributor - were commercial and industrial loans outstanding, average duration of unemployment (inverted), ratio of consumer installment credit to personal income, and ratio of manufacturing and trade inventories to sales. The average prime rate charged by banks held steady in October. Based on revised data, the lagging economic index decreased 0.5 percent in September and decreased 0.4 percent in August.
